Why Glencore’s Longtime Lenders Haven’t Walked Away
By-
Commercial banks lend about $20 billion to commodities house
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Glencore CEO says banks `very supportive’ of trading company
Each summer, Glencore Plc gathers its bankers at an exclusive Swiss resort for a day of golf. The hospitality has a rationale: those who convene at the Golf Club Bad Ragaz, nestled among Alpine foothills, represent the company’s financial lifeline.
Three months before this year’s outing, 60 lenders — from BNP Paribas SA of France toUniCredit SpA of Italy — signed off on $15.25 billion in credit lines to the commodities house. That’s more than double the $7 billion in revolving loans the company took out a decade ago.
Since May, Glencore’s shares have dropped by more than half on speculation the firm may struggle to manage its debt burden during the commodities rout. While that turmoil rattled markets and forced Glencore to step up debt-cutting plans to reassure investors, it didn’t shake the backing of the firm’s lenders, according to five of the company’s bankers and executives at rival commodity trading firms who asked not to be identified because they aren’t authorized to speak publicly…
Why Glencore’s Longtime Lenders Haven’t Walked Away
